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The Strategic Use of Private Quality Standards in Food Supply Chains

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  • von Schlippenbach, Vanessa
  • Teichmann, Isabel

Abstract

This paper highlights the strategic role retailers private quality standards play in food supply chains. Considering two symmetric downstream firms that are exclusively supplied by a finite number of upstream firms and letting the upstream firms decide which retailer to supply, we show that there exist two asymmetric equilibria in the downstream firms quality requirements. The asymmetry is driven by both an increase in the retailers buyer power and the retailers competition for suppliers. The use of private quality standards induces a decrease in social welfare, which can be softened by the implementation of a public minimum quality standard.

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Bibliographic Info

Paper provided by German Association of Agricultural Economists (GEWISOLA) in its series 51st Annual Conference, Halle, Germany, September 28-30, 2011 with number 114519.

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Date of creation: 2011
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Handle: RePEc:ags:gewi11:114519

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Keywords: Private Quality Standards; Vertical Relations; Buyer Power; Food Supply Chain; Agribusiness; Agricultural and Food Policy; Agricultural Finance; Food Consumption/Nutrition/Food Safety; Industrial Organization;

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References

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Cited by:
  1. Vanessa von Schlippenbach & Isabel Teichmann, 2011. "The Strategic Use of Private Quality Standards in Food Supply Chains," Discussion Papers of DIW Berlin 1120, DIW Berlin, German Institute for Economic Research.
  2. Bouamra-Mechemache, Zohra & Jianyu, Yu, 2013. "Production Standards, Competition and Vertical Relationship," TSE Working Papers 13-417, Toulouse School of Economics (TSE).

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